MIT Sloan Management Review Article on Algorithmic Management: The Role of AI in Managing Workforces

With the help of digital technology, complex managerial tasks, such as the supervision of employees and assessment of job candidates, can now be taken over by machines. While still in its early stages, algorithmic management — the delegation of managerial functions to algorithms in an organization — is becoming a key part of AI-driven digital transformation in companies.

Algorithmic management promises to make work processes more effective and efficient. For example, algorithms can speed up hiring by filtering through large quantities of applicants at relatively low costs.1 Algorithmic management systems can also allow companies to understand or monitor employee productivity and performance.2 However, ethical challenges and potential negative downsides for employees must be considered when implementing algorithmic management. In the case of hiring, AI-enabled tools have faced heavy criticism due to harmful biases that can disfavor various groups of people, resulting in efforts to create guidelines and regulations for ethical AI design.

About the Author

Mohammad Hossein Jarrahi is an associate professor at the UNC School of Information and Library Science. Mareike Möhlmann is assistant professor in the Information and Process Management department at Bentley University. Min Kyung Lee is an assistant professor in the School of Information at the University of Texas at Austin.

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